Beats Music Gives Apple 30% Of The Pie For New iPhone Subscribers

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Streaming media services that want to sell subscriptions to users of their apps on the iPhone or iPad have to make a deal with the proverbial devil: if they want to sign up customers on an iOS device, they have to give Apple a 30% cut of the sale.

For music subscription services like Rdio and Spotify, where the margins are razor thin, giving up that 30% cut is enough to turn a subscription from a profit to a break-even proposition. So when a company goes this route, it’s easy to assume they are hurting.

By this logic, Beats Music — the new subscription music service launched in January — is hurting.